DataMules Blog

Business Models and Google Chrome

Recently, I've been thinking about various business models that companies
employ. Creative business models (or maybe they would be better referred to as
creative revenue strategies) can be obvious in hindsight yet profound in
impact. For example, a few years ago I had thought that
Firefox survived through donations. Instead,
I
learned
that they harness a much more powerful technique by partnering with
Google.
Of course, once you understand the strategy, you can see it employed
elsewhere if
you look hard enough. And it makes sense - give the user something they want
(seemingly for free) and figure out how to profit from it elsewhere. It's a
win-win situation.

After learning how Firefox makes money, Google
Chrome starts to make a little more sense. Eric
Schmidt noted that he didn't want to build Chrome
initially,
but you have to suspect that spending
$72m
on a deal with Firefox may have had as much influence on his decision to
proceed with Chrome as the quality of the prototype did. Any user they could
steal from Firefox would be that much less they have to pay in future
royalties. Further, if Google could capture market share through Chrome in
addition to those already using Firefox, it simply meant that many additional
users that will have Google as their default search engine.

What may be most interesting though (at least in terms of this post) is the
"non-obvious" reason for creating Chrome. Google's extreme attention to
detail,
coupled with a novel idea - combining the search and address bar - may have
given them additional incentive to build Chrome. First, for an end user the
combined search/address bar ends up being quite convenient; you no longer think
about searching versus visiting a website, you simply type and go. But the
clever part is that this allows Chrome to default to search above all else.
For example, you might search for affiliate marketing (or anything for that
matter) and stumble upon the Wikipedia
page. But when you hit
Ctrl-L and start typing 'affiliate marketing' again, the Wikipedia page is
the second choice rather than the first:

The default is to return to Google - and more people visiting Google means more
people clicking ads. So not only does Chrome have the ability to lower costs,
it may have the ability to increase revenue as well.

Note: I've noticed that Firefox now also defaults to search if you type
something in the address bar that doesn't represent a web page, but I believe
that came after the introduction of Chrome. Also, if you hit tab in Firefox it
still defaults to a page you have previously visited.